How Much Blame Does Obama Deserve For Deficits?

Two of the big stories in the world of politics and finance this past week were:

1) The continued fallout over the botched Facebook IPO
2) The rumble over who deserves the blame for the deficits that the United States has posted over the past 3-4 years

The powder keg for the debate over the nation's deficit situation came in the form of an article by Rex Nutting on Marketwatch.com titled "Obama Spending Binge Never Happened".

In his article, Nutting argues that "federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s". Nutting tries to argue against those who portray President Barack Obama as a reckless spender who is unconcerned about the future health of the nation's finances.

Nutting also argues that much of the spending for the 2009 fiscal year was already locked in by the time that Obama took office in January of 2009 (Presidential terms overlap fiscal years, which means that the outbound President has to sign the budget for the coming fiscal year before he leaves).

This article was a lightning rod of controversy this week, as Rush Limbaugh, the Washington Post and countless other publications rushed to analyze and, in many cases, destroy the argument that Obama's administration has been one of thoughtful and restrained spending.

Mitt Romney and Barack Obama, who will be squaring off against each other in November, have both waded into the conversation as well, with Romney criticizing the President's spending policies and Obama accusing Romney of distorting and twisting his record.

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There are two important parts of the deficit equation. It's not just spending that matters - it's also revenues.

Spending has spiked since the start of the "Great Recession" - in 2008, the US government had less than $3 trillion in expenditures. By 2013, this number will be up to $3.72 trillion.

The other important part of the deficit equation is revenues. Revenues dropped thanks to the "Great Recession" (reduced individual and corporate tax receipts, etc) and have struggled higher in the years since.

The precipitous drop in revenues has played a major role in the trillion dollar deficits that have plagued the country for the past four years.

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Everybody is asking the same question right now - has Barack Obama spend too much money since being elected?

Another important question that should be asked is - has Barack Obama done enough to accelerate the nation's revenue growth?

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One thing is for sure - the nation's financial health will probably be THE most discussed issue in the upcoming Presidential race.